GBP/USD Price Analysis: Bearish bias remains intact while below 21-SMA

• GBP/USD is attempting a bounce above as USD bulls take a breather.
• The cable remains capped below 21-SMA on 4H amid Brexit, UK political woes.
• RSI recovers but stays below 50.00, keeping sellers hopeful.

GBP/USD is fading an uptick to daily highs of 1.3891, although remains well off the weekly lows at 1.3855 in early European dealings.  

The retreat in the US dollar across the board helps the rebound in the cable but the risk-off market mood spoils the party for the bulls.

Despite the renewed upside, the pair remains exposed to downside risks amid expectations of earlier Fed’s tapering, looming Brexit concerns and the UK political jitters.

Read: UK’s Kwarteng: Finance Minister Sunak doing a fantastic job

GBP/USD technical outlook

Looking at the four-hour chart, GBP/USD is has bounced off the falling wedge support at 1.3855, although the upside attempts remain capped below the downward-sloping 21-Simple Moving Average (SMA) at 1.3905.

The immediate resistance is seen at the 50-SMA of 1.3913. Further up, the falling wedge upside barrier at 1.3935 could be put to test if the recovery momentum picks up pace.

However, with the Relative Strength Index (RSI) still lurking below the midline, the cable’s bounce appears shallow.

A breach of the abovementioned critical support could open floors towards the horizontal 200-SMA at 1.3835, almost where the 100-SMA lies.

GBP/USD four-hour chart

GBP/USD additional levels to watch